Dak, Inc. - Page 11

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          respondent and to refute respondent’s proposed deficiency.                  
          Respondent had substantially completed his audit of petitioner at           
          that time, and Mr. Ozenne was called upon to negotiate with                 
          Revenue Agent Caprio, who was conducting the audit of petitioner.           
               When Mr. Chiate called Mr. Ozenne as a witness for                     
          petitioner, Mr. Ozenne took the witness stand, carrying with him            
          a bundle of notes.                                                          
               Mr. Chiate asked Mr. Ozenne to explain to the Court what he            
          had done to document the fact that there was no deficiency for              
          the year at issue.  He was asked to “start from the beginning,              
          and just explain to the Court what you’ve done in that respect.”            
          Counsel for respondent was otherwise occupied, and the Court                
          asked the witness what he was referring to.  The Court was                  
          informed that the witness had made notes of points that he wanted           
          to cover in his testimony although he opined that he probably               
          could not cover his material if Mr. Chiate did not inquire.                 
               Mr. Chiate agreed with Mr. Ozenne’s observation and then               
          informed the Court that he would be using Mr. Ozenne’s notes for            
          examination.  Respondent did not object, and the interrogation              
               Mr. Ozenne testified that he met with Mr. Caprio,                      
          respondent’s auditing agent, and they discussed the subject of              
          overrings.  Mr. Caprio agreed that overrings were included in               
          respondent’s determination of unreported income, and he reduced             

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Last modified: May 25, 2011